Washington, DC — The U.S.-Africa Business Summit hosted by the Corporate Council on Africa (CCA) begins Tuesday in Philadelphia. With some 1,500 participants expected, including two Presidents, four Prime Ministers and over 100 government ministers, it will be the largest gathering of U.S. and African business and government leaders ever to come together on U.S. soil (outside the United Nations in New York).
The event is being mounted a few weeks later than planned, thanks to the World Trade Center and Pentagon attacks of September 11, but attendance is expected to be just as high.
Conflict resolution, trade and investment and health - especially HIV/Aids - are among critical issues the gathering will address. Especially high on the agenda, and the subject of special workshops, will be the African Growth and Opportunity Act (AGOA) passed in the U.S. Congress last May. A one-day Forum, to be addressed by President Bush and other senior cabinet officials, takes place Monday at the State Department in Washington, DC, to review the legislation's impact so far.
AllAfrica's Charles Cobb Jr. spoke with CCA President Stephen Hayes about AGOA and other matters related to U.S. trade and investment with Africa. Excerpts:
The CCA Summit was postponed; has the CCA agenda changed in the wake of September 11?
We actually have gained participants as a result of the postponement. I'm a little surprised by this; we expected to lose when in fact we have gained.
In addition to the net gain, we have also added about a hundred ministers coming for the AGOA Forum in Washington, D.C. The ministers then will be going up to the Summit [in Philadelphia] where they will participate in AGOA workshops. So, as a result of the postponement I think we have strengthened our relationship with the U.S. government, increased the depth of the Summit, and increased the number of participants, so that it will be the largest such conference.
Does the agenda change? Probably not, except that it makes us realize that doing business with Africa is going to require far more intensity than may be normal. I think we're going to have to work at it a lot harder. Africa is seen still - somewhat unfairly - as a high-risk venture by most businesses in this country. Venture capital for Africa is going to be harder to obtain. It's going to require more persuasion of companies that Africa is a good investment, which I think it is. So, the challenge of doing business with Africa is a little harder but [September 11] doesn't change our agenda.
So companies are more reluctant to invest in Africa since September 11?
No, it's too early to tell. What has happened - we have continued to gain numbers at the Corporate Council since September 11. We've added at least six members over the last four weeks. So this says that businesses are interested in strengthening their investment in Africa.
Is the discussion of AGOA a priority?.
Obtaining financing has got to be one priority. I think AGOA, for our next two years, is going to be another priority. This organization came in late in the fight on AGOA. I think we made difference when we did come in but nevertheless, we came in late. For the next round and for helping businesses we're going to try to work from a leadership role in AGOA. We're going to have a staff person working on AGOA - we haven't done that before - and we're going to try to put whatever weight this organization has behind AGOA, and behind other organizations working on AGOA as well.
What does it mean for the Corporate Council on Africa to work on AGOA? What will you do?
A couple of things; first of all, our members represent 85 percent of all U.S. investment in Africa. Obviously that has to include the oil companies. There are a lot of jobs related to Africa and they can push for Africa a lot more actively. When you have that much at stake - this organization has a lot of influence that it really used well in the past; I think it can be used more wisely in support of AGOA. One of the failings of AGOA, I think they're saying now, is that the American people behind AGOA haven't done a good job communicating about AGOA. There is a Zogby poll that will be released before our Summit noting that most African leaders don't understand AGOA.
The other part of it is, if you go to businesses around the country, I wouldn't be surprised if 95 out of 100 have never heard of the Africa Trade Bill. Yet one of the greatest secrets of AGOA is that it is a great way to invest in Africa, and it should be used. But nobody's out there giving that message. So another thing the Corporate Council could be doing more of is that education process, especially in working more with our membership to see that they benefit from this legislation.
But for an observer during the debate last year on AGOA, if there was any consensus at all among African countries and ambassadors here in Washington, DC, it was that AGOA was a priority. How can most African leaders not understand AGOA?
I think they all know about AGOA. For example, we're now a year and a half into AGOA and very few countries have gotten the certification yet, so there are questions, and I think, a lot of education and work to be done.
What concerns do you think participants from African countries are bringing to the Summit, and what do you think is needed?
I think what they need is partnerships. What is interesting is that you have over 600 African businesspersons coming, all paying full rate. They are not subsidized; they're not under some government. They are coming here for one reason - to find partners.
The African businesspeople are coming to to do business, net partnerships. The American businesspeople need reliable, trustworthy partners in Africa if they are going to be able to do business, particularly middle-sized and small businesses. The future of African development is more dependent on small and medium-sized businesses than the large corporate presence.
But I think the Africans don't fully understand what's required to do business with the U.S. - the issues of infrastructure, reliable electricity, road systems, and also the transparency issues, rule of law. On the other hand, from this side, we're not providing financing for U.S. businesses. We have maybe six private banks in this country that will finance business in Africa. That's insufficient if you're really going to invest in Africa.
So, the problems aren't only on the African side. They are also on the U.S. side.
So when you approach a company about doing business in Africa, what argument do you make?
The argument is that Africa is one of the best places for investment in terms of rate of return. That is a fact. Given the American economy right now, the new markets are primarily in Africa.
There's basically a billion people - not quite the population of China - in Africa. Everyone says, well the Chinese economy is far more advanced. Parts of the Chinese economy are, but again, out of that 1.2 billion in China, 900-million are peasants. And those peasants have a lower standard of living than most Africans. So my argument is that Africa is a far superior market than China, especially for small and medium-sized businesses. China is a better market for larger corporations. For small and medium-sized businesses which I think are essential to Africa and the United States, Africa is a far better market, and an easier market in fact.
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I think we ought to be educating the American public to put a lot more emphasis on Africa. A small, family-run business - in Philadelphia's inner city, for example - could be linked right now with exporters from Africa for textiles and so forth. That's quite possible.
Even at that micro level I think there's a lot to be said for U.S. - Africa trade.
U.S. businesses raise reliability and corruption as problems in doing business with Africa; what do you say?
I alluded to transparency earlier. I don't think Africans completely understand that if they really want to change their economy, how badly that issue needs to be addressed right away.
On the other hand, peoplearedoing business there. So it's not impossible. That's why one of the things I want to get out of Philadelphia, is partnership. If you can identify reliable business partners you've got a far better chance of being successful.
And you have to identify the financing. Financing is very, very difficult to find, especially at the scale of less than a million. A lot of small and medium-sized businesses don't need a million dollars; they need less. Ironically, it's harder to get that money than large grants. So, we've got to make a priority in this organization of financing, figuring out where to get it. And what you're doing is financing American investment in Africa.
Especially since September 11, but even before, the threat of world recession loomed large. How does this impact on what you want to see happen?
I think it makes it more difficult because the risk [of doing business in Africa] is seen as greater - the point I was making at the beginning. I would argue that trade between the United States and Africa is an area that could help us recover from the recession. It would perhaps not be the greatest part, but it would be an important part of the recovery.
